Jersey Oil reduces costs, relinquishes licences

Jersey Oil and Gas was working to assure shareholders of its viability on Monday, as it reduced costs and relinquished a number of licences - though the company was positive about the farming out of one of its projects.

The AIM-quoted independent oil and gas company said that it had implemented further cost savings and salary reductions, which should see it continue operating with its existing cash resources into 2017.

It said further oil price declines since the previous update in December 2015 were creating "exciting opportunities" for the company.

"[Jersey Oil & Gas] has no existing debt, a clean balance sheet access to debt capital and significant tax losses available to execute on its states objective of acquiring interests in lower cost tie back fields capable of generating positive cash flow at an oil price of $30 per barrel", the company's board said in a statement.

The company said that, together with its co-venturer CIECO, it was going through the farm-out process for its Cortina blocks awarded in the 28th licensing round.

"The Cortina blocks are located in the UK Central North Sea and straddle the western end of the North Buchan Graben in a water depth of between 100-128 metres", the board said.

"The acreage lies in a prolific, proven, light oil fairway close to the Buchan and Tweedsmuir oilfields with ease of access to surrounding infrastructure".

Interest had been expressed by "several parties", it said.

The firm said it had relinquished the Liberator block of Licence P.1610 as of 6 January 2016 as a result of ongoing licence fees. It had also relinquished the Niobe-Kratos blocks of Licence P.1889 as of 31 December 2015 given there was no remaining drillable prospectivity.

It said a decision by the joint venture partners had been made to relinquish the Romeo blocks of Licence P.1666 as of 11 February 2016, removing further cost exposure for Jersey Oil & Gas.

As of 1300 GMT, shares in Jersey Oil & Gas were up 9.38%, to 8.75p.